Accounting

Benji Watson graduated near the top of his class in the Liberty University MBA program, and he was recruited by several national corporations. One of those corporations was New Gen Health Sciences. New Gen manufactures and sells various vitamins, health foods, and health supplements; it was recently featured in Fortune Magazine as one of the fastest growing companies in America.

Benji was invited to attend a weekend-long “Get to Know Us” event at New Gen’s headquarters in Seattle, WA, with all expenses paid by New Gen, an invitation that he agreed to accept.

While sitting in the Richmond, VA, airport, awaiting his flight to Seattle, Benji decided to do some online research about New Gen. Most of the articles touted the great financials the company was producing. One article talked about how New Gen sent researchers around the world in search of new beneficial health resources. Another article contained an interview with New Gen’s founder and CEO talking about his “mission” to create a healthier America and about his company’s industry-leading ethics code.

Another article, however, mentioned how the founder and CEO had a pattern of starting new businesses, building them up and then, selling them at a huge profit before moving on to something else. (This isn’t illegal but it is considered unethical. The ethics argument has two sides – many CEOs consider this a standard business practice to make money and keep companies profitable.) There was also another article that talked about how New Gen was a big contributor to Planned Parenthood, the ACLU, and various “progressive” causes. (See my discussion below about this issue.)

Benji also came across a “gripe site” that accused New Gen of various questionable business practices such as: forced purchase; tie-in agreements with their distributors that required distributors to purchase set amounts of product with payment in advance, regardless of the distributors’ actual sales (this is unethical); and required...